A federal judge has denied permission to the US Securities and Exchange Commission (SEC) to inspect the software of crypto-exchange Binance US. This request was made after the regulator accused Binance’s US subsidiary of not cooperating with its investigation.
SEC vs Binance US: no inspection of crypto-exchange software
According to reports, it appears that the US Securities and Exchange Commission (SEC) has not been granted permission to inspect the software of the crypto-exchange Binance US.
It was denied by Federal Magistrate Judge Zia Faruqui, who said she was “not inclined to allow the inspection at this time.”
Not only that, Faruqui also insisted that the SEC should file more focused requests and talk to more witnesses.
It was a small victory in the home of Binance US, the US subsidiary of the popular crypto-exchange that was accused by the watchdog agency for not cooperating with its investigation.
Specifically, the SEC had urgently requested on 18 September, the intensified scrutiny of Binance US, namely permission for the court to proceed with the inspection.
This was because, in its view, Binance would not provide the SEC with all the documents it had been asked for, or “would slow down the provision of such documents.” Not only that, other concerns were raised about the crypto-exchange’s custody of customer assets, especially after the resignation of CEO Brian Shroder, and other managers such as Krishna Juvvadi and Sydney Majalya.
The regulator also alleged that BAM, the entity behind Binance.US, attempted to circumvent transparency by presenting carefully curated narratives and statements, dismissing concerns as irrelevant.
SEC vs Binance US: June’s first crypto-exchange victory
Last June, Binance CEO Changpeng CZ Zhao himself had expressed relief over the issue related to Binance.US and the unfreezing of its assets.
And indeed, in the ruling on 18 June, Judge Jackson had approved the proposed stipulation and consent order reached between Binance US and the SEC.
In essence, this is an agreement between the parties indicating a mutually acceptable solution to the SEC’s concerns, resulting in the “unfreezing” of the crypto-exchange’s assets.
Note that all of these battles between Binance US and the SEC, started exactly on 5 June, when the regulator published the 13 charges against the crypto-exchange. Among the 13 charges is that of offering unregistered security to U.S. customers.
Russia’s exit from the market
While Binance’s US subsidiary is in an ongoing fight with the SEC, the global crypto-exchange, on the other hand, is making other kinds of decisions, such as exiting the Russia market.
Basically, from what has emerged, the cryptocurrency exchange has allegedly helped Russian citizens evade sanctions imposed by Western countries on several occasions after Putin and his army began their invasion into Ukraine from February 2022.
To avoid getting involved with such charges, Binance has introduced new measures that prevent its Soviet customers from trading currencies other than rubles on the P2P platform.